CYIL vol. 16 (2025)

CYIL 16 (2025) THE ‘SUSTAINABLE’ MEANING OF THE NOTION OF INVESTMENT… economic aspects, such as social and environmental ones, express references to sustainable development were rather rare. 40 Obviously, references to ‘economic development’ or ‘development’ were common in investment treaties, 41 but they were understood as economic in nature, which remained in line with quid pro quo of investment arbitration. Today’s shift towards greater presence of states’ interests in investment treaties together with greater openness on different (environmental, labour, social etc.) interests brings sustainable development to the centre of attention of investment treaties and, consequently, investment arbitration. Nevertheless, the question of whether investment arbitration should serve sustainable development remains still unresolved. 42 Investment treaties do not bring any unambiguous answers. Although it is noticed that provisions of investment treaties relating to sustainable development are increasingly more often incorporated into treaties’ preambles, 43 the pace of these changes is still relatively slow. The OECD study of 2014 evidenced that while inclusion of sustainable development has become a dominant treaty practice present in more than three-fourths of investment treaties concluded between 2008 and 2014, the overwhelming majority of 88% investment treaties still did not contain any reference to sustainable development. 44 More recent studies does not reveal any breakthrough in this respect. The United Nations Conference on Trade and Development (UNCTAD) study of 2022 indicates that of 224 investment treaties concluded since the adoption of the Sustainable Development Goals Agenda by the UN General Assembly in 2015, only 31% include provisions addressing the sustainable development goals directly. 45 Similarly, the analysis of ASEAN investment treaties performed in 2022 reveals that still only 26% of these treaties contain any reference to sustainability issues. 46 Nevertheless, the trend of incorporating sustainable development into the texts of investment treaties is visible and cannot be ignored. The reform of investment treaties has multiple dimensions, since narrowing the scope of investment protection manifests itself also in adopting restrictive definitions of investment in investment treaties. As a result, definitions of investment in recently concluded investment 40 An example is the preamble to Canada Model BIT of 2004 accessed 30 September 2025. See LEVASHOVA, Yulia, ‘Role of sustainable development in Bilateral Investment Treaties: recent trends and developments’ (2011) 1 Journal of Sustainable Finance & Investment 222, 225. More on preambular references to sustainable development see: BALTAG, Crina, DAUTAJ, Ylli, Investors, States, and Arbitrators in the Crosshairs of International Investment Law and Environmental Protection (Brill Nijhoff 2020) 16–18. 41 See Preamble to Germany–Tanzania BIT (signed 30 January 1965, entered into force 12 July 1968) accessed 30 September 2025: ‘ Recognizing that encouragement and contractual protection of such Investments are apt to stimulate private business initiative and to increase the prosperity of both nations ’. 42 FAUCHALD (n 38) 181. 43 CORDONIER SEGGER, Marie-Claire, Crafting Trade and Investment Accords for Sustainable Development (OUP 2021) 176–183. 44 GORDON, Kathryn, POHL, Joachim, BOUCHARD, Marie, ‘Investment Treaty Law, Sustainable Development and Responsible Business Conduct: A Fact Finding Survey’ (2014) 1 OECD Working Paper on International Investment, 5. 45 United Nations Human Rights Council, Expert Mechanism on the Right to Development, ‘Right to development in international investment law. Overview of the ongoing study by the Expert Mechanism on the Right to Development’, Fifth session, 9–11 March 2022, para 12. 46 MCLAUGHLIN, Mark, ‘Mapping Sustainable Development in Investment Treaties: An Analysis of ASEAN States’ Practice’ (2022) 17 Asian Journal of WTO and International Health Law and Policy 115, 131.

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